Govt asks miners for turnover-based donations to junior fund

Godfrey Oliphant, deputy mines minister

SOUTH Africa’s Department of Mineral Resources (DMR) has approached the country’s mining sector to contribute a portion of its turnover to a junior miner exploration fund which will also be backed by the Industrial Development Corporation (IDC), said Godfrey Oliphant, deputy minister of mines.

“We are developing a junior miners’ funds for exploration capital for black emerging miners,” said Oliphant in a keynote speech at the Junior Indaba, a mining conference in Johannesburg. “The PIC [Public Investment Corporation] has also agreed to make a significant contribution to the fund,” he said.

“It is a programme I think should succeed. We have approached the formal sector to contribute a small portion of their turnover to the fund,” he said.

Earlier Bernard Swanepoel, the convener of the Junior Indaba conference and former CEO of Harmony Gold, criticised the government and the Minerals Council for failing to accommodate the needs of the junior mining sector, especially in the drafting of regulations for the mining sector.

“I get the sense that we don’t think we are in competition with the rest of the world,” said Swanepoel. “I think we’ll lose out to Zimbabwe. I think more money will go to Zimbabwe than South Africa this year,” he said.

Responding to questions from the press on the sidelines of the conference, Oliphant said the fund would be capitalised at about R200m with the IDC and the PIC contributing equal amounts to the fund. The amount the formal mining sector would have to contribute was less clear, however.

Oliphant said a requirement in the existing Mining Charter that mining companies contribute 1% of turnover to fund emerging and small-scale mining might be adopted, although he added: “There are some questions about this”.

4 COMMENTS

  1. Another cost to struggling mines – again the anc government suffers from the delusion that mines have unlimited money to spend as if the social and labour plans were not enough.

  2. You got to be kidding me. Existing companies have stopped exploration due to the demise in commodity prices and the risk involved in exploration. Now they need to contribute to others to have a no-risk venture. This must be a delayed April’s fool joke! Not going to happen. Exploration is high risk and need to be self funded up to a certain point. Once you secured the rights and drilled the area to some extent to prepare a competent persons report, only then can you approach the market. Government should stop with this foolish plans. What junior exploration companies require is information. SAMRAD need to be reliable and up to date. If a right has expired, update the system. The fact that DMR hides most of the information on SAMRAD contributes to corruption. All information on the system should be visible to all, such as contact details of holder, duration of right, expiry date and renewal details. Furthermore, DMR need to process applications in order of receipt and not in order of those who pay most. Then, DMR has to streamline the application process. Nema is just too rigid, time consuming and expensive. If people such as Bernard Swanepoel is serious about developing junior mining in RSA, they should go back to basics….and basics start at availability of information, quick turnaround of processing of applications by honest Government Officials…. and everything else will follow. The problem is that Bernard Swanepoel and friends were executives at the Big Mining Houses and the Chamber of Mines or whatever the new name is. They know nothing of putting together a project with limited funding and resources. They thus have no authority on the matter, etc. Mining Weekly editor recently had a discussion with Allan Saad, a well known geologist and previously president of the Foreign Investors. Let people like him tell you what need to be done to develop junior mining and forget about the fat cats who like nothing more than making jokes at Indabas and like to be seen.

  3. Stakeholder theory at it’s best. Unfortunately the custodians of the South African economy do not have any idea about value creation.

  4. hahahahahahahahah this is laughable… So the 1% to BEE didnt fly, so we renamed it 1% for SME fund, to be given purely to BEE….

    Wow these guys think we are all as dumb as the people who vote for them…

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